African business, politics and lifestyle
New Africa about much more than football
The first World Cup in Africa also highlights a dramatic change driven by forces more powerful than football.
While the competition may help change Africa’s image in the minds of any outsiders still fixated on cliches of bloodshed and famine, those in the know long ago spotted Africa’s emergence from no-go zone to frontier market and are seeing the returns.
If you had put $1,000 in Nigerian or Kenyan stock markets at the start of the year, you would have made a profit of around $150. If you had done the same with the U.S. benchmark S&P 500 index, you would be nursing a loss.
Global fund trackers EPFR reported a 40th consecutive week of inflows to African equity funds this week. India’s Bharti Airtel completed a $9 billion purchase of Zain’s African operations in another vote of confidence in the continent.
“It’s not to denigrate the World Cup for a moment, but it’s not what defines Africa in 2010. What should really be defining Africa is Zain buying Bharti’s assets,” said African affairs commentator Joel Kibazo.
“I think there is still a false image of Africa even in South Africa, never mind the rest of the world, about the rest of the continent. The fact is, it has really been getting ahead and there are more people with money to spend.”
Half of the world’s 10 fastest growing countries will be in Africa in 2011 according to the International Monetary Fund.
Better economic management, increased political stability, debt relief, higher production and prices for export commodities and technology — mobile phones in particular — have all helped improvement.
Africa’s fate these days is also less linked to handouts from former colonial powers, themselves struggling under debt burdens proportionally bigger than Africa’s. It is more closely tied to Asian and other more dynamic economies.
“We need to wipe out that smug Western view of more risk in Africa,” said David Murrin, chief investment officer at UK-based Emergent Asset Management.
“As Western belts tighten and we start to deal with fiscal situations, the political risk differential is closing rapidly.”
Although Africa is seen in a much more positive light than for decades, however, its growth is from a low base and countries face challenges from bogus democracy to shambolic services to ethnic division.
No other African country appears to have the capability to host the World Cup yet and it is hard to forecast when that might be the case.
Infrastructure such as power and roads are dire and Africa needs an estimated $93 billion a year to improve it. South Africa has appalling crime levels, but its police and justice system are efficient compared to those in much of the continent.
Egypt lost out to South Africa for the 2010 contest, but some Egyptians doubted it was really ready for such a challenge.
“I don’t think we had the capabilities,” said student Mohamed Nabil in Cairo. “It’s good for South Africa. They’re way ahead of us. But it’s nice that the World Cup is held in Africa in general. That is progress in itself.